Considering how much time your customers spend on their smart devices, digital marketing may as well just be called “marketing.” Online marketing efforts, prominently including paid ad purchases, are the backbone of any sophisticated strategy today.
So, what would you think if you realized all of your spending on digital display ads was going to waste? That the people who were supposedly viewing those ads didn’t actually exist? Because that’s what happens when you’re the victim of ad fraud.
Ad fraud is a blanket term for a variety of underhanded tactics scammers can use to undermine companies’ digital marketing campaigns. If left unchecked, these techniques can drain your digital ad budget without getting you the results you’ve paid for.
There’s a real risk of encountering ad fraud today if you’re not prepared to recognize and deal with it. So if you want to launch your next digital ad campaign without looking over your shoulder in worry, it’s time to look into countermeasures.
Ad Fraud: A Quick Definition
Many digital ads are sold per click or per view. This means ad fraud is the process of falsifying those clicks or views to make ad buyers think they’re getting their money’s worth when they’re not.
Fraudsters who perpetrate digital ad fraud are interested in taking as much money from advertisers as possible, filling their coffers without putting in the effort to actually provide service. Ad fraud that does actually earn traffic, but not from legitimate potential customers, can be called invalid traffic (IVT).
Ad networks and online publishers are the parties that stand to profit from companies’ ad spend. While honest and reputable networks and publishers won’t engage in ad fraud, there are numerous fraudsters present in the marketplace who are skilled at imitating legitimate businesses.
By learning about the many kinds of digital fraud practiced against businesses, you can become a savvier ad buyer and get ahead in the cat-and-mouse game between companies and criminals. With recent research indicating that advanced technology tools, including generative AI models, are producing ever-more-convincing ad fraud examples, your company can’t afford to sit back.
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How Does Ad Fraud Hurt Companies?
Ad fraud hurts your business in a few different ways simultaneously. This is simply logical: If your digital advertising budget is going to waste earning impressions that aren’t actually real, you won’t get any of the hoped-for benefits.
Specifically, the consequences include:
- Lost impressions: When you pay per click or per ad impression, then you’re counting on the fact that those clicks and impressions are coming from real potential customers. When you’re the victim of ad fraud, they don’t. Maybe your ad is being “seen” on a page despite the fact that it’s been wedged into one near-invisible pixel. Or perhaps all those “clicks” are coming from mindless bots. While you can see a list of ad fraud tactics below, the overall concept is easy enough to understand: You’re paying for something that you’re not getting.
- A lack of information: There’s a more subtle added consequence to losing the impact of your digital marketing. Namely, the impressions that come from advertising are valuable in analyzing your customer base and developing new marketing strategies. If those impressions are falsified or otherwise useless, you lose access to a valuable data source. The lack of data damages your ability to understand your audience and determine which kinds of digital ads are having an impact.
As the victim of fraudulent activity, you’re still spending 100% of your advertising budget, but just receiving a fraction of what you’ve paid for. Especially in tight financial times, you can’t afford such a major hole in your digital ad budget.
6 Types of Ad Fraud To Guard Against
Learning about some of the specific tactics fraudsters use to undermine ad buyers can help you stay on guard. What’s most striking about these methods is just how many points in the digital marketing system are prone to failure or abuse. Striking back against digital ad fraud means monitoring all these potential vulnerabilities and implementing countermeasures.
1. Domain Spoofing
Domain spoofing is also known as ad impression laundering. It’s based on the fact that in impression-based digital ad buying, some domains are worth more than others. If your ad appears on a highly reputable and popular site, that’s valuable — so fraudsters falsify data to incorrectly claim that ads are appearing on such sites.
To complete this type of fraud, a perpetrator needs to manipulate data to make a disreputable site appear to be a reputable one. The site can be a poorly trafficked or low-quality page, or a false site created by the fraudster themself.
2. Ad Stacking
Ad stacking means running many ads in one spot on a website. Only one ad is visible in such an ad placement arrangement, but according to the fraudsters’ data, all the many ads stacked on that specific space count as viewed, thus earning the fee for an impression.
Fraudsters can charge multiple advertisers for all the ads in a stack, or charge one ad buyer for multiple ads. Meanwhile, most of these ads aren’t showing up for site visitors, and the companies that bought them never realize that fact. A related form of ad placement fraud is known as pixel stuffing — placing ads in 1 pixel by 1 pixel spaces, so they’re essentially invisible but count as viewed.
3. Ad Injection
Ad injection means making an ad appear on a site without the site owner’s permission. Fraudsters use malicious code to force viewers to see their ads, then charge ad buyers for the impressions as if they were earned through normal, above-board means.
Injected ads are a blatantly illegal form of digital advertising fraud — they involve fraudsters installing malware on users’ PCs to make their ads appear. Bad actors executing these schemes get to collect revenue for having their ads seen by legitimate users of popular websites, with the buyers not knowing how those impressions came about.
4. Click Fraud
Click fraud means using fraudulent clicks to satisfy the conditions of pay-per-click display ads. In these cases, an advertiser pays for a certain number of user click-throughs. The intention is for the ad to run until it earns traffic for the buyer’s website. Fraudsters can use bots to click on these ads, earning their fee without any real users clicking on the site.
Bots aren’t a necessary part of click fraud — fraudsters can have human employees click on ads. The through line, however, is that no actual prospective customers are involved with the fraudulent clicks. Victimized ad buyers think their campaigns have successfully earned the contracted amount of clicks, and spend accordingly.
5. Geo Masking
Geo masking is similar in overall concept to domain spoofing, in that ads are being displayed, but not in the way fraudsters say they are. Also known as location fraud, this involves falsifying geographic data around an ad’s audience.
Ad buyers pay to have their materials seen by potential customers in specific locations. Geo masking is designed to lie about which audience is viewing an ad, creating an inaccurate trail of data and charging money for a job that hasn’t actually been completed according to the buyer’s specifications.
6. Cookie Stuffing
Cookies track user behavior, and therefore, they can be important parts of ad campaigns that are billed based on conversion rates. If a user bearing a certain cookie becomes a customer, it serves as proof that an ad worked. By stuffing cookies indiscriminately into users’ browsers, fraudsters can claim credit for conversions they didn’t earn via this fake traffic.
Since cookies are so versatile, there are other potential ways to commit cookie stuffing fraud. IAB Europe describes a method in which ad fraudsters stuff bots with cookies to make them look more like legitimate, valuable web users when committing fake click fraud.
Taking Action Against Ad Fraud
With so many points where fraudulent activity can infiltrate the ad buying process, fighting back against this crime involves working with trustworthy partners at every step of your digital marketing efforts. Reputable consultants and agencies can provide support and steer your organization’s strategy, ensuring you work with approved services, companies and ad tech tools at every step.
Your own internal teams also have a role to play in preventing ad fraud through diligent monitoring. This can mean:
- Actively observing campaign progress and using industry-standard measures and benchmarks to monitor the progress of each individual ad buy.
- Requesting frequent, detailed reports from all ad partners, including raw performance data.
- Filtering raw data and using key performance indicators that provide a holistic picture of campaign performance.
- Working with ad tech platforms and ad network partners that have certifications and approvals from industry oversight bodies.
Becoming a victim of digital advertising fraud is easy in such a busy field, but it’s also relatively easy to stay safe. By devoting some extra time and effort to your digital ad buying process, you can see the signs of danger early and keep your organization secure.
Keep a Close Eye on Your Digital Marketing
Despite the ever-present risk of fraud, today’s companies need to be ready to commit to effective digital marketing. You can’t let ad fraudsters scare you away from employing display ad strategies that are right for you.
Digital advertising, when properly managed, vetted and overseen, is a crucial component of a well-rounded marketing strategy. When deployed alongside content creation, email marketing and other leading methods, it’s a perfect way to maximize your visibility.